{
  "slug": "medical-practice-valuation-multiple",
  "title": "Medical Practice Valuation Multiple Calculator",
  "heading": "Medical Practice Valuation Multiple Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/medical-practice-valuation-multiple",
  "summary": "Estimate practice value using EBITDA multiples common in physician practice M&A.",
  "description": "Private equity and health system acquisitions of physician practices are almost always priced off a multiple of normalized EBITDA, not revenue, since revenue tells you nothing about profitability across wildly different specialty cost structures. This calculator takes the practice's adjusted EBITDA (net income plus owner compensation above market rate, plus interest, taxes, depreciation, and amortization, minus any one-time or personal expenses run through the practice) and applies a specialty-appropriate multiple range to produce a low-mid-high valuation estimate. Multiples vary significantly by specialty and scale — high-volume, procedure-heavy specialties like dermatology, gastroenterology, ophthalmology, and orthopedics with ASC ownership command higher multiples (often 8-12x EBITDA in platform deals) than primary care or lower-margin cognitive specialties (typically 4-7x). Scale matters too: a single-provider practice generating $400K EBITDA will value at a meaningfully lower multiple than a 15-provider platform generating $6M EBITDA, since buyers pay a premium for scale, de-risked physician dependency, and existing management infrastructure. This is a starting-point estimate only — actual deals also weight payer mix, growth trajectory, real estate ownership, ancillary service lines, and physician non-compete and employment terms, all of which move the final multiple materially from a simple EBITDA-times-multiple estimate.",
  "formula": "Valuation = adjusted EBITDA × multiple. Low/mid/high estimates use the specialty-typical multiple range, scaled up modestly for larger EBITDA (platform scale premium).",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=medical-practice-valuation-multiple",
  "inputs": [
    {
      "id": "adjustedEbitda",
      "label": "Adjusted (normalized) EBITDA",
      "kind": "number",
      "hint": null,
      "default": 1200000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "lowMultiple",
      "label": "Low-end multiple for specialty",
      "kind": "number",
      "hint": null,
      "default": 5,
      "unit": null,
      "min": 1,
      "max": null
    },
    {
      "id": "highMultiple",
      "label": "High-end multiple for specialty",
      "kind": "number",
      "hint": null,
      "default": 8,
      "unit": null,
      "min": 1,
      "max": null
    },
    {
      "id": "providerCount",
      "label": "Number of providers",
      "kind": "number",
      "hint": null,
      "default": 6,
      "unit": null,
      "min": 1,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "midVal",
      "label": "Mid-point valuation estimate",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "lowVal",
      "label": "Low-end valuation estimate",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "highVal",
      "label": "High-end valuation estimate",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "midMultiple",
      "label": "Implied mid-point multiple",
      "format": "decimal",
      "hint": null,
      "primary": false
    },
    {
      "id": "ebitdaPerProvider",
      "label": "EBITDA per provider",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Adjusted (normalized) EBITDA: 1200000 $",
      "Low-end multiple for specialty: 5",
      "High-end multiple for specialty: 8",
      "Number of providers: 6"
    ],
    "outputs": [
      "Mid-point valuation estimate: $8,040,000",
      "Low-end valuation estimate: $6,000,000",
      "High-end valuation estimate: $10,080,000",
      "Implied mid-point multiple: 6.7",
      "EBITDA per provider: $200,000"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter adjusted (normalized) ebitda ($).",
      "Enter low-end multiple for specialty.",
      "Enter high-end multiple for specialty.",
      "Enter number of providers.",
      "Read your mid-point valuation estimate on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "adjustedEbitda": 725000,
        "lowMultiple": 3,
        "highMultiple": 4.8,
        "providerCount": 4
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "adjustedEbitda": 1200000,
        "lowMultiple": 5,
        "highMultiple": 8,
        "providerCount": 6
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "adjustedEbitda": 1925000,
        "lowMultiple": 8,
        "highMultiple": 12.8,
        "providerCount": 10
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "What EBITDA multiples are common by specialty?",
      "a": "As rough 2023-2024 market ranges: dermatology and ophthalmology platforms 8-14x, gastroenterology and orthopedics with ASC 7-11x, dental and veterinary (comparable dynamics) 6-10x, primary care and multi-specialty 4-7x, and behavioral health 5-9x depending on payer mix and scale. These compress in weaker M&A markets and expand for platforms with strong growth stories."
    },
    {
      "q": "How do I calculate 'adjusted' EBITDA correctly?",
      "a": "Start with net income, add back interest, taxes, depreciation, and amortization, then add back owner physician compensation above a fair-market-value replacement salary for that specialty (since a new hired physician wouldn't earn what the owner pays themselves), and add back one-time or personal expenses run through the practice like vehicles or excess travel."
    },
    {
      "q": "Does real estate ownership change the valuation?",
      "a": "Yes — if the practice owns its building, that's typically valued and sold separately from the operating business (often via a sale-leaseback), and shouldn't be embedded in the EBITDA multiple for the practice itself. Keep real estate value and lease terms in a separate line of the deal."
    },
    {
      "q": "Why does provider count affect the multiple?",
      "a": "Buyers pay up for reduced key-person risk — a single-owner practice is existentially exposed if that physician leaves, retires, or gets sick, while a 10+ provider platform with distributed patient panels and some non-owner leadership is far more resilient, which directly supports a higher multiple in negotiations."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/ehr-software-tco-per-provider",
    "https://www.revenuelab.fyi/toolbox/locum-tenens-vs-hire-cost"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Medical Practice Valuation Multiple Calculator (https://www.revenuelab.fyi/toolbox/medical-practice-valuation-multiple)"
}